Mobility insights from the International Transport Forum at the OECD

“There is a lot of untapped potential in rail”

Laurent Troger, president of Bombardier Transportation, talks about how digitialisation impacts rail, the rise of the mobile economy and why he sees a bright future for rail travel.

Digitalisation is revolutionising everything. How is it changing rail transport?

I see digitalisation as a major accelerator, reinforcing the role of rail as a backbone of mobility in the 21st century and beyond. Societies around the globe are facing pressing challenges today: urbanisation, climate change and inclusiveness only to name a few. I believe rail is the answer to these challenges and digitalisation will significantly accelerate the pace of change. Only by embracing the accelerating process of digitalisation can we deal with the challenges of mass mobility, prevent traffic collapses, reduce pollution, improve safety and meet the demand of modern passengers by enhancing their travel experience.

And how does that play out in your company?

The way we approach digitalisation at Bombardier is to cover the complete value chain, making our production processes more efficient, improving asset management and increasing the safety and capacity of our transport systems through automation and predictive maintenance. At the same time, we will use new digital technologies to ease the passengers’ A to Z journey and focus on passenger comfort, reliability, availability and connectivity. There is a lot of untapped potential in the rail industry, just waiting to be unleashed.

Other modes are also reinventing themselves. Once self-driving cars and trucks become widespread, will that not undermine the business case for rail?

Lifestyles have changed, people are moving with different and changing patterns every day, optimized through modern technology. Mobile economy is the buzzword: it means working at home, working at different offices, in different places. In response to this trend, transport plans need to manage the fluctuating demand for services and increase flexibility. Passengers will have more options to choose from and will choose the best

Automated People Mover in Beijing (Photo: Bombardier)

alternative depending on their specific needs. They need to be able to count on reliable services. And at the end of the day, the travel experience will be a decisive factor. Passengers value reliability, punctuality and connectivity. Ultimately, I believe that rail transport is, and will remain, an essential driver of the mobility ecosystem. Rail is green, safe, reliable and cost-efficient. And we will continue to innovate in order to improve the travel experience of our passengers by offering additional services, while other modes – such as Uber, or car- or bicycle sharing –make it easier for passengers get to and from the station.

Innovation cycles are getting shorter and shorter, but rail infrastructure is expensive and not built in a day. Will that not give other modes a competitive edge over rail?

You’re touching on a very valid point indeed. In our industry, innovation cycles have been painfully slow if you compare them to the start-up scene. However, the fact is that there are thousands of innovators around the globe who share our passion for developing smart and sustainable mobility solutions. They have lean, agile approaches and a fantastic entrepreneurial mind-set. I see this as an opportunity, rather than a threat. Why compete, when we can join forces? We see many new digital business models emerging in rail – and mobility in general. At Bombardier, we are closely following these trends and accelerating our digitalisation initiatives.

Why should investors bet money on the future of rail?

The world population is set to grow, and will increasingly be living in cities. Today, around 54 per cent of the world’s population lives in cities. By 2050, 66 per cent of the world population will live in urbanised areas and by the end of the 21st century, more

ICE 3 high-speed train in Germany (Photo: Bombardier)

than 80 per cent of the world’s population will be urban. I am sure you’ve heard these figures before. They are both cause and effect of economic growth. They indicate that there will be hundreds of millions of increasingly well-off, educated people going to work, taking their children to school, visiting each other and going on holidays. One common theme for all of these cities worldwide is the challenge to organise and manage the constant flow of people and goods. So the market potential is huge. If you add the fact that economic activity worldwide is projected to pick up pace in 2017 and 2018, especially in emerging markets and developing economies, the global outlook for rail is very positive.

Until the next economic downturn?

On top of that, this market is very resilient. As you probably remember, in 2008, at the peak of the crisis, our industry faced no significant downturn. Why? Because most of the politicians on the planet realized that investing into infrastructure projects, and in particular into public transport, is good for their economy. Unlike the airline industry, we in rail have always had steady growth in front of us and that also holds true going forward.

Laurent Troger is the President of Bombardier Transportation, one of the world’s leading manufacturers of planes and trains. Based in Montréal, Canada, Bombardier employs 66 000 people worldwide. Its rail division builds everything from sleek high-speed bullet trains to public transit rolling stock. On 31 May, Laurent Troger will join a debate on “The governance of transport in a digital economy” with, inter alia, China’s minister of Transport Xiapeng Li, OECD-Secretary General Angel Gurría and Siemens Mobility CEO Jochen Eickholt at the ITF 2017 Summit on “Governance of Transport”.